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Treasurer blocks Chinese land bid

The sale of S. Kidman & Co to a Chinese investor won't go ahead with Scott Morrison saying it's not in the national interest.

Mr Morrison said he remained concerned that the size and significance of the sprawling Kidman portfolio being sold as a single entity put it out of the reach of a domestic buyer.

"The size of the asset makes it difficult for any single Australian group to acquire the entire operation," he said. He stressed the decision reflected only his "preliminary view" and the relevant parties would be able to respond to his findings by Tuesday.

Chinese investors will be looking closely at the regulatory decisions over the Kidman cattle empire. Photo: Glenn Campbell

Last week, he commissioned an independent review of the sale process to examine market integrity issues, chaired by former competition tsar Graham Samuel.

The Treasurer would not release the review due to commercial-in-confidence contents. He said it found that while the sale process "followed a satisfactory commercial practice that offered opportunity to Australian parties to make an offer", there nonetheless remained "significant domestic interest in Kidman".

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Mr Morrison had raised similar concerns when he originally rejected the proposed sale in November. "I am not yet satisfied these concerns have been addressed by the revised proposal," he said on Friday afternoon.

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The 101,411 square kilometre group of 10 cattle stations and associated properties sprawls over four states and territories, and is one-and-a-half times the size of Tasmania. The applicant, Dakang Australia Holdings Pty Ltd, is a Shenzen-listed company controlled by the conglomerate Shanghai Pengxin. That group is owned by Zhaobai Jiang, a billionaire property developer based in Shanghai, who has also bought up agricultural property in New Zealand and the South Pacific.

Announcing his decision in Canberra, the Treasurer said he had also considered "the impact the decision may have on the broader Australian support for foreign investment" in agricultural land. "This is always a relevant consideration," he said.

Mr Morrison said he would not take questions about the decision. Asked how the government could reconcile blocking foreign investment with the upcoming federal budget, which is billed as a pro-investment push, he referred to his pre-prepared statement.

"The Turnbull government welcomes foreign investment where it is consistent with the national interest. However, we must always ensure it is on our own terms," he said.

The announcement is a big win for the Nationals, who also celebrated former treasurer Joe Hockey's rejection of a US takeover bid for GrainCorp in 2013. Those who spoke to Fairfax Media on Friday afternoon welcomed Mr Morrison's decision.

"My constituents would be very happy with that," said NSW Nationals MP David Gillespie, who called on local super funds to "see the value" of investing in Australian agricultural assets.

"A lot of super funds have to report an increase in the value [of their investment] in six months' time," he said. "To get ahead you have got to a hold and work an asset for a longer time frame."